Go to jail Meredith!
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- Published: Friday, 04 May 2012 14:20
Go to jail Meredith!
The High Court on Thursday 3 May hammered the final damning nails into the disgraced corporate reputations of seven James Hardie Board members. The Court unanimously held that the seven non-executive directors had breached their duty to act with care and diligence by approving the release of a statement to the stock exchange in 2001 which misled the market about the company's funding of its workers’ compensation liability. The Court overturned a decision of the NSW Court of Appeal which had let the disgraced directors off the hook.
These people are all corporate bluebloods, previously respected by business, government and the market. They are now disgraced and, trying to cut a complicated story short, the Court also referred back to the NSW Court of Appeal the consideration of penalties including disqualification. The High Court makes it abundantly clear that the Board knew the foundation was underfunded and had specifically developed a strategy to restrict news to the finance pages and their narrow sectional interests rather than provide it generally as news.
James Hardie has killed more Australian workers than most. While Australian workers will continue to die for decades from contact with their products, the damage is not just restricted to anyone employed by them but they've also killed kids, wives, family and friends who came in contact with the dangerous asbestos fibres - fibres known to be dangerous when mined in ancient Greece and the Roman Empire.
Companies manufacturing asbestos sheeting in our lifetime preferred to employ older workers. They believe this managed their financial liability because mesothelioma symptoms take a long time to appear and if they employed older blokes they are more likely to have retired and die before the asbestos gets them.
It is now up to the NSW Court of Appeal to review punishments. Not being able to operate as a company director again is the least of it and the original fines of $35,000 each for these seven should have a series of zeros added.
More is the pity that these are not criminal offences and this lot of miscreants won't end up in jail. It is a pity too that we still don't use the stocks because it would be fitting for the seven executives, and especially ex Chairman (sic) of the Board Hellicar, to spend a few weeks in the stocks in Martin Place so that we can all tell them what we think.
While the High Court has nailed these people for endorsing a misleading media release about the underfunding of their liability, there are many implicated in the approval of the NSW Government for Hardy to restructure and move its centre to the Netherlands as part of a process of trying to quarantine their asbestos liability.
Amongst other things, 80 blueblood respectable people of wealth, privilege and reputation provided character statements in support of Hellicar when first prosecuted. I'm going to publish who those people are.
As the Chair of the Investment Committee of LGS I attended the annual conference of the Australian Council of Superannuation Investors in Melbourne in 2004. The guilty Hellicar participated in a panel about corporate behaviour. She was politely asked a question about the recently announced NSW Government investigation of the underfunding of their liability and she told a packed hall of institutional investors that the company had done nothing wrong and that all would be proven. We suspected it was a lie then and we know it is a lie now and I will always regret I didn't boo and heckle this disgraceful performance.
But no one else did anything either. Institutional investors in Melbourne are all very polite and wouldn’t want to frighten the companies Australian superannuation funds invest in. Even those killing Australians, deliberately underfunding their liability for compensation and misleading the market and everyone else about it.
Maybe it's time to do some frightening.
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